Companies like DoorDash have been subsidizing worker rates with tips
Digital tips given to delivery workers of companies like DoorDash may be used for base payment instead of providing extra income, according to a recent article by NBC News.
The article reports that DoorDash drivers receive a guaranteed rate depending on the job, and if the customer doesn’t leave a tip, Doordash will pay the full base rate. However, if the customer does tip, that money can subsidize the base rate so DoorDash can drop what the company owes the worker, according to the article.
The article also points out Instacart’s use of this model, which it quickly addressed. Both companies originally said that the structure helps to guarantee fair payments, according to the article.
Read the full article here.